SHAREHOLDERS of Suez SA voted in favor of merging with Gaz de France yesterday in a deal aimed at creating one of Europe's biggest energy companies.

GDF shareholders are expected to give their approval at a separate meeting later.

The merger of Franco-Belgian Suez, France's second-largest electricity producer, and French state-controlled gas monopoly Gaz de France will create one of the world's largest listed utilities, after nearly two-and-a-half years of legal and political delays.

Suez Chairman Gerard Mestrallet, who will also head the combined GDF Suez, called the merger "a historic step" for Suez and "the biggest merger in France in 20 years." Suez shareholders approved the merger terms with 99.6 percent of the vote. The new company, called GDF Suez, is to formally launch on the French stock exchange next Tuesday.

The merger was first announced in February 2006 but hit repeated snags. The deal requires the privatization of GDF, opposed by employees and some French lawmakers. Critics feared job cuts and said customers could face lesser service and higher prices.

The two companies' boards approved the new merger terms last month.

They include an exchange ratio of 22 Suez shares for every 21 GDF shares, after 65 percent of the capital of subsidiary Suez Environnement is distributed to Suez shareholders.